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Press release from CNW Group

CHINA HEALTH LABS & DIAGNOSTICS LTD. ANNOUNCES NEW CUSTOMER FOR POCT DIAGNOSTICS FIELD LABS

Monday, January 24, 2011

CHINA HEALTH LABS & DIAGNOSTICS LTD. ANNOUNCES NEW CUSTOMER FOR POCT DIAGNOSTICS FIELD LABS09:00 EST Monday, January 24, 2011TORONTO, Jan. 24 /CNW/ - China Health Labs & Diagnostics Ltd. ("China Health" or the "Company") (CHO: TSXV), is pleased to announce that it has been listed as a supplier to China's National Emergency Rescue Team (the "NERT") with an initial order of 13 "Type A" Point of Care Technology (POCT) diagnostic field labs. The initial order is expected to generate revenue of over RMB 13 million (approximately $2 million), and is expected to be delivered mostly in the first quarter of 2011.The NERT was established in 2010 by the central government of China as a first responder to natural disasters such as earthquakes and floods. The NERT commenced operations with 13 "Central Level" teams to be deployed as needed in China and to international emergencies. In addition, the central government is expected to establish "Provincial Level" teams to cover China's 32 provinces, municipalities and autonomous regions. The NERT will be focused on emergency response, and will work with the Chinese military to coordinate responses to major natural disasters within China."We are very pleased to be named as a supplier to the NERT, our second major customer for POCT products. Our POCT business had strong growth in 2010 based on increased orders from the Chinese military, our initial customer," said Wilson Yao, CEO of China Health. "We have developed a unique patented solution with no direct competitors in China based on our healthy relationship with the Chinese military. This sale validates our confidence to invest the time and resources to develop a full range of diagnostic products and services for the military and emergency services sector. With our proprietary products and early success in delivering results in the field, we believe that POCT products will be one of our key drivers of revenue and profit growth as we build our business with the Chinese military and the NERT and seek new customers."China Health has established a strong working relationship with the Chinese military, which has lead to the cooperative development of POCT products for a wide range of applications. As disclosed in a press release dated December 8, 2010, China Health signed a three year research and development agreement with the Chinese Military Medical Equipment Research Institute, based in Tianjin, and with the Third Military Medical University, based in Chongqing, to develop POCT solutions and products for military and rescue diagnostic field lab applications.In 2009, when China Health made its first sales of the POCT "Type A" diagnostic field labs, sales to the military accounted for 10.8% of revenues or approximately $2.6 million of $23.8 million of total annual revenues. As previously announced, the Company expects to report that POCT sales to the Chinese military has more than doubled for the full year of 2010 compared to the same period in 2009. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.FORWARD LOOKING INFORMATION AND NON-GAAP MEASURESThis press release contains forward-looking statements and information that are based on the beliefs of management and reflect China Health's current expectations. When used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. The forward-looking statements and information in this press release includes information relating to sales of POCT products, the delivery schedule of POCT products, and the revenue and profit growth of POCT products. The forward-looking information is based on certain assumptions, which could change materially in the future, including the assumption that the orders for POCT products will result in sales, payment and revenue recognition, the delivery of POCT products will be on schedule, and POCT products will be key drivers of the Company's revenue and profit growth. Such statements and information reflect the current view of China Health with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the risks that the POCT product orders from the NERT may not result in sales, the Company may not be able to deliver the POCT products on schedule, and the Company's POCT products may not contribute to revenue and profit growth as expected. China Health cautions that the foregoing list of material factors is not exhaustive. When relying on China Health's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. China Health has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to above will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.China Health has also included in this press release figures based on orders received, which is a non-GAAP measure. Readers are cautioned that such a measure is not recognized under Canadian GAAP and should not be construed to be an indicator of performance or liquidity or cash flows.  China Health's method of calculating this measure may differ from the method used by other entities and accordingly China Health's measure may not be comparable to the measure used by other entities.THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE REPRESENTS THE EXPECTATIONS OF CHINA HEALTH AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE.  WHILE CHINA HEALTH MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.For further information: Kim Oishi, Director Telephone: (416) 865-3351 Email: koishi@chinahealthlabs.com